Lower GST-free threshold to $20: McInnes

Retail reporter

The GST-free threshold makes it almost 'impossible to compete internationally', McInnes says.

Premier Investments chief executive Mark McInnes has lashed out against the federal government's refusal to lower the GST-free threshold on imported goods.

Speaking at a Trans-Tasman Business Circle lunch today, Mr McInnes said retailers in Australia could not compete with overseas players who could ship products into the country valued under $1000 and avoid paying duties and GST.

"It's almost impossible to compete internationally when the government doesn't allow for a level playing field," Mr McInnes said.

Mr McInnes called on the federal government to lower the GST-free threshold to $20 from the current $1000 level.

He said recent estimates showed the government was missing out on $1 billion in GST revenue because of the loophole on imports. He again raised the issue of security as packages came into Australia and weren't being checked.

Mr McInnes said he was in Britain last week to talk to people about Premier Investments growth prospects and they "almost laughed" at the fact individuals could bring up to $1000 in goods into Australia without paying GST.

Mr McInnes said ALP policy was stifling investment and competition in the retail sector.

Landlords with 'old world view'

Mr McInnes also said the relationship between landlords and retailers was changing and coming under increasing pressure as the trading environment was affected by online retail.

He said landlords just couldn't see from their position the value, power and vibrancy of online retail and how that was changing the valuation of real estate property trusts.

He said many landlords had an "old world" view of the retail landscape. Rents that were just increased at a "CPI plus" level could not continue.

Last year Premier Investments warned commercial property owners it would exit stores unless rents began to better relate to the downturn in traditional retail, with Lower traffic to shopping centres, and the rise of online.

Supply process investment flagged

At the lunch, Mr McInnes also said the company - owned by Solomon Lew with brands such as Just Jeans, Dotti, Portmans and Smiggle - would review its supply management processes to better match the demand of shoppers with its merchandise in its national store network.

He said the investment was necessary for the retailer to remain internationally competitive.

Mr McInnes said the decision to invest more in its supply management process was made after a recent sale saw one if its retail chains sell 250 more clothing items than in its computer tracking system said was in the stores.

He said this fresh investment would position Premier Investments to grow and remain competitive in the face of relentless offshore competition.